AUDCAD had previously been trading below a descending trend line on its 4-hour time frame but price just made an upside breakout. From there it rallied to a high of .9961 before showing signs of a pullback.
Using the Fib tool on the latest swing high and low shows that the 61.8% level lines up with the broken trend line resistance, which might hold as support. This is also near the 100 SMA dynamic inflection point.
However, the 100 SMA is still above the longer-term 200 SMA for now, indicating that the path of least resistance might still be to the downside. If so, a move back to the previous lows near .9750 might be possible.
Stochastic is heading lower but is already in the oversold area so a return in buying pressure could be seen. RSI is also heading south and has quite a long way to go before reaching oversold levels so sellers might still have enough energy to push lower.
US crude oil inventories rose 3.1 million barrels, higher than the forecast of 2 million barrels but lower than the API figure of 7.1 million barrels. This was enough to spur a crude oil price bounce in yesterday’s US session, although the bigger picture hasn’t changed that much and producers are still unwilling to trim output.
Australia’s quarterly private capital expenditure report is up for release next and a 3.0% decline is eyed, slower than the previous period’s drop. A higher than expected reading could spur a bounce, probably bringing AUDCAD up to the recent swing high of .9961 and beyond.
Moving forward, crude oil updates could continue to push the Loonie around, as positive updates could mean more gains while the lack of an accord between OPEC and non-OPEC officials could spur more losses.
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